Hidden Inflation? The Bread Test

December 5, 2007

The latest inflation reports for Australia are showing the seasonally adjusted underlying figure of 4% with headline inflation around 3%, but I’m starting to not believe it.

We’ve always been impartial to Bakers Delight White Flour Loaf bread (recommended for those in Australia…just great bread). Around this time last year it was around $2.20 or $2.30 a loaf. This morning I discovered that it had gone up yet again, this time from $3 to $3.20. That’s $1 in 12 months, and I can still remember paying $2-$2.10 a loaf for it in early 1996. There has alway been price rises, but this year a white flour loaf has gone up a whopping 45% and it seems there’s a 10-20c price rise every month or two. Sure, it’s only a dollar, but apply 45% to a range of other goods as well. Certainly our shopping bill has seriously risen this year, where as we might have spent $100-$130 at Coles a week (not including meat) we’re now spending $150-$180, and that’s with us buying most of our fruit and veg from the local farmers market (in bulk, cheap and wonderfully fresh). I’d hate to think what it must be like on struggle street at the moment, maybe this is part of the reason why voters chucked the Howard Government out?

2 responses to Hidden Inflation? The Bread Test

  1. Bread would be much more expensive right now because wheat has hit a record high price. Caused by a combination of the drought in Australia, flooding in Europe and increased demand for grain in India/China.

  2. As well as the drought problems (and the impracticality of importing bread to make up the deficit), there’s also the growing problem of “eco friendly” fuels like bio-ethanol causing wheat and corn prices to rise (due to the demands on the land).